Posts Tagged ‘saab finances’

Production of the Saab 9-4X continues but the rest of its line-up is on hold.

Things look great for Saab – at least on paper, the struggling Swedish maker haven’t lined up an assortment of investors promising to pump $100s of millions of dollars into the company – but the reality is far more bleak.

With unpaid suppliers increasing pressure to get Saab to pay the $625,000 they’re owed, the Swedish Enforcement Agency is warning it may begin legally seizing the carmaker’s assets. That would be a very likely prelude to the collapse of the company, which has been struggling to re-open its headquarters factory in Trollhattan since partsmakers began a boycott in March.

With the factory that produces the flagship 9-5 model, as well as the smaller 9-3 idled, dealers around the world have been running short of product. And Saab’s coffers continue to drain since its revenue stream begins the moment products roll off the line.

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The company desperately needs a “major automotive partner,” asserts IHS Automotive analyst Aaron Bragmann, but there is no one likely to come to Saab’s rescue at this point, he contends, a position most other analysts echo.

It’s getting hard to tell the players without a scorecard, especially as Saab continues to spread its net hoping to come up with cash that can keep the financially struggling company afloat.

Less than a week after admitting it doesn’t have the resources to make payroll, the Swedish maker has announced yet another Chinese company has offered to lend it a hand, this time agreeing to pay $18.4 million in cash for 582 unsold Saab cars. Meanwhile, efforts continue to win the approval of regulators in Europe and China needed to ensure that several other proposed deals can be completed, giving Saab enough cash to get it beyond the current crisis.

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“I am pleased to announce this agreement as it secures part of the necessary short-term funding for Saab Automobile and allows us to pay our employees’ wages before the end of this month,” Chief Executive Victor Muller said in a statement.

But it remains to be seen whether the latest bailout will be enough to get Saab back into production again, observers caution.

The Saab assembly plant, in Trollhattan, will remain shut until at least July 4.

Despite the appearance of two Chinese white knights, the situation continues to deteriorate for Saab, the struggling Swedish automaker missing a payday for 3,800 of its employees.

On Monday, Saab officials met with workers at the company’s Trollhattan assembly plant and advised them not to return to work until July 4. The plant has been out of operation since June 8 due to problems paying suppliers. A prior boycott by partsmakers had led to a two-month shutdown that only ended in late May.

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The latest short-term crisis raises further concerns about Saab’s long-term viability, one analysts warning, “Time is a luxury it no longer has.”

“Swedish Automobile N.V. (Swedish Automobile, formerly Spyker Cars N.V.) announces that Saab Automobile AB (Saab Automobile) will be unable to pay the wages to employees as it has not yet obtained the necessary short-term funding,” Saab’s parent company said in a release this morning.

Cash-starved Saab’s assembly lines have come to another grinding halt as the maker struggles to resolve a financial crisis that has shut down its headquarters plant for much of the last two months.

The news that the Trollhattan plant is down again, and likely won’t be running until at least next week – at the earliest – is a setback for the Swedish maker, which had hoped to resolve its problems with the partnership it inked last month with China’s largest dealer network.

But “the liquidity situation is still tense,” the Swedes acknowledged today, despite an initial payment from Pang Da. A number of other issues apparently have yet to be resolved, a Saab release noted, meaning production can be “easily disturbed” in the near-term.

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“It is therefore very difficult to make further predictions,” as to when the Trollhattan plant will resume operations – and for how long, acknowledged production director Gunnar Brunius. As a result, he said, “We have to take one day at a time. In order to avoid taking on more supplies than necessary, we have decided to reduce production plans this week. We are all working hard to get production running consistently again, and as soon as possible.”

A “minor glitch” has led to the second shutdown of Saab’s headquarters plant, in Trollhattan, Sweden, in barely a week – suppliers refusing to provide critical parts because, they claim, they haven’t been paid.

Though Saab officials insists they have enough ongoing money to keep going through at least 2012, the latest crisis raises new concerns about the future of the struggling carmaker – which was purchased from General Motors in early 2010.

“We are trying to reach a solution with the suppliers,” asserted Saab spokeswoman Gunilla Gustavs, industry sources fear the situation is only growing worse.

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Saab’s Trollhattan plant was briefly shuttered last week but it initially appeared the maker was able to resolve what Chairman Victor Muller described as a “minor glitch” and make the necessary payments.

Though Muller last month told TheDetroitBureau.com Saab had more than $200 million remaining from the loan provided by the European Investment Bank, he also indicated the Swedish company was looking for new investors. That was one reason why parent Spyker Cars sold off its Dutch-based sports car manufacturing operations.